Say you're about to roll out a seasonal mail campaign or exhibit at a trade show. What kind of sales payback can you expect from such marketing initiatives? Is there a general rule? M.H. "Mac" McIntosh, president of The Mac McIntosh Co., a $400,000 consulting firm in Redondo Beach, Calif., thinks so.
McIntosh, who tracks sales leads for a living, has developed benchmarks that he says can be used in business-to-business selling scenarios. Through research studies for his customers that traced more than 40,000 sales inquiries, McIntosh has found that 24% of people who respond to a promotion will buy from someone--either you or a competitor--within 6 months. Forty-five percent, he says, will buy within 12 months. "Within a year, nearly one in two will buy somebody's product or service," McIntosh explains. Here's his formula for projecting a sales promotion's performance:
(# of raw leads) x (% who will buy from someone) x (average $ sales amount) x (% you contact) x (% you normally close) = gross-revenue potential
If you follow up on leads for six months, for example, you'd plug in 0.24 for "percent who will buy from someone." Closing rates vary widely, but whatever your norm is, McIntosh firmly believes it can be bettered by simply following through on the leads sitting in your lap. He finds that companies follow up on only about 10% to 15% of inquiries, on average.